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A Look at The Ways You Can Pay Off Your Mortgage Early
A mortgage is a significant financial commitment that can last for several decades. While paying off a long-term mortgage early is a difficult task, if a borrower is able to do so before the end of the term they can save a lot of money on interest payments. In this article, we will discuss the ways a borrower can pay off their mortgage early.
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- Make extra payments
By making additional payments to the principal owed, you can pay off your mortgage early. Borrowers who use this method either send extra money with regular mortgage payments or make a lump sum payment.
- Refinance and make same payments
Another way that borrowers pay off their mortgage early is by refinancing to a mortgage with a lower interest rate, but continuing to make the same payments as before. By doing this, you can pay off your new mortgage sooner than the old mortgage.
- Increase monthly payments
Another way to pay off your mortgage early is to increase your monthly payments. You can increase your payments by a fixed amount or a percentage.
- Make bi-weekly payments
By making payments every two weeks instead of once a month, you will make 26 payments a year instead of 12. This means you will make an extra payment every year, which can help you pay off your mortgage before the end of the term.
Before moving forward with one of the avenues above, it's important to speak with your lender to understand any prepayment penalties or other factors that may impact your early payment strategy.
See other articles related to: mortgages
This article originally published at https://dc.urbanturf.com/articles/blog/a_look_at_how_you_can_pay_off_your_mortgage_early/21017.
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